Gilly Construction trades in an old tractor for a new tractor, receiving a $28,000 trade-in allowance and paying the remaining $84,000 in cash. The old tractor had cost $75,000, and straight-line accumulated depreciation of $40,625 had been recorded to date under the assumption that it would last eight years and have a $10,000 salvage value. Answer the following questions assuming the exchange has commercial substance. 1. What is the book value of the old tractor at the time of exchange

Varto company has 9,400 units of its sole product in inventory that it produced last year at a cost of $23 each. this year’s model is superior to last year’s, and the 9,400 units cannot be sold at last year’s regular selling price of $42 each. varto has two alternatives for these items: (1) they can be sold to a wholesaler for $8 each, or (2) they can be reworked at a cost of $251,100 and then sold for $34 each. prepare an analysis to determine whether varto should sell the products as is or rework them and then sell them.